Multistate Professional Responsibility Exam Practice Question
Carla provides legal services for real estate closings. A real estate broker, who sends multiple clients to Carla, wants a percentage of Carla's closing fees as compensation. Carla wonders if this arrangement is permitted.
It is acceptable if Carla notifies clients that the broker receives part of the closing fees.
It is acceptable if Carla and the broker enter into a valid contract outlining the referral fee.
It is not permitted, because lawyers do not share fees with nonlawyers outside of recognized exceptions like payment of staff salaries.
It is acceptable if Carla designates the broker as a consultant who is compensated from the legal fees received.
A lawyer may not split fees with a nonlawyer outside of limited exceptions, such as paying regular employee salaries or contributing to retirement plans. Because the broker is a nonlawyer requesting a percentage of the legal fee for referrals, the arrangement is prohibited. Disclosure to the client, labeling the broker a consultant, or merely having a written contract does not cure the Rule 5.4 violation.
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